Other states shouldn’t follow Hawaii’s $18 example

Featured image

As state legislative sessions wrap up and ballot measures are shaping up for the fall, it’s becoming increasingly clear that a $15 per hour wage target is old news for unions and activists.

Now, states are moving toward more extreme wage hikes: Hawaii’s legislature just approved an $18 per hour state minimum wage. California voters may face a ballot question in November that would do the same in the Golden state. New York lawmakers are considering a bill that raises wages in the state up to $20.45 per hour. A Congressional candidate from Washington state now argues $30 per hour should be the “floor” for wages.

While the “Fight for $15” was just a campaign built on a catchy slogan run by the Service Employees International Union, organizers admitted there was no reasoning behind choosing $15 as their target. In fact, a $15 minimum wage is not based on any economic precedent.

On the contrary, the majority of economists oppose a $15 per hour minimum wage. When asked specifically about the $18 per hour proposals in California and Hawaii, nearly three-fourths of those surveyed also indicated that if enacted, these minimum wages would cause job loss in both states.

Hawaii’s increase to $18 represents a more than 80% hike from its current rate of $10.10 per hour.

While the majority of economic literature concurs that wage hikes do cause employment loss, a state-level analysis by economists from Miami and Trinity Universities shows even a $15 minimum wage in the Aloha State would cost over 3,600 Hawaiians their jobs – primarily in the hospitality and retail industries.

Job opportunities have slowed down in light of the state’s legislated increases: full-service restaurant employment declined by 1.3% in 2018 after the $10.10 per hour mandate was implemented, compared to prior average annual growth of 5% in years prior.

States considering competing with Hawaii’s new highest wage in the country should instead heed the warnings of economists.